Know Your Exam #1 — FRM
By Harsh Kedia (https://www.linkedin.com/in/harsh-kedia1997/)
“Two roads diverged in a wood … I took the one less traveled by, and that has made all the difference.” — Robert Frost
By the time 3rd year had begun, the internship fever was already high, and naturally, I too entered the rat race. I started competitive coding abruptly with no plan, track, or roadmap ahead. Things ended the way one could imagine, I failed to bag an offer.
Gradually, I started scrambling through pieces of different Investment Bank Internship offer letters and researched what verticals these banking companies hire in, and I was surprised to find Risk Management as one of them.
I curiously started to surf it on the web, and a pandora’s box suddenly opened before me. That moment I realized I have been living a frog’s life, swimming in the pond all this time. There are plenty of routes to get into big IBs or for that say into the financial world. Out of all the things, my eyes glued on to the two reputed certifications CFA/FRM.
With CFA(Chartered Financial Analyst) having higher eligibility criteria on graduation year and work experience, I decided to opt for FRM(Financial Risk Manager), thinking I might get the upper hand in the placement sessions on clearing it. I started gathering information about it online, and as strange as it might sound, got hold of textbooks for FRM through Facebook. After going through the first few pages, I decided to give it a shot and talked to parents, convincing them to fund me by connecting them to finance professionals and take them by confidence.
Preparing for the exam was never easy. Every now and then I would hear about my peers getting high-pay internships in coding roles but I firmly stood on my strengths. Sheer determination to justify your honor and commitments is the only thing that helps you. Trust me, only this works!!
Syllabus wise I feel no engineer is inept at completing it, but time management is a significant factor given the academic routines you have to keep up with. Level 1 consisted of topics that were completely new to me, and to deal with them or whenever I got stuck, I had to regularly contact my commerce folk back in my hometown. Concepts like BSM, bond valuation, Value at Risk, option strategies, and normal distribution took hell lot of time to cope with. Yet, level 1 was a cake-walk given I had little experience in the finance domain then.
Amidst everything, you can immediately start talking to professionals on LinkedIn using your 1-year free GARP membership! Don’t underestimate the power of LinkedIn. Connect and get all the valuable mentorship you can get…and If you are lucky and capable, they might shower you with internships as well.
Level 2. A wave of overconfidence and over-optimism will beat you down irrespective of your stature. In Level 2, the course content is huge, and elaborate unlike Level 1 which I had no idea about. The sheer number of concepts and extensive syllabus are not to be taken lightly as I did. I underestimated the harshness of level 2 and instead focused more on college academics and took a huge blow in my first attempt. All I could do was to stand strong, take responsibility, and wait for the right time to bounce back. You might feel alone but trust me people/mentors will vouch for you, but only if you open up!
By the start of the placement session in 4th-year, there is fear revolving in every corridor. Everyone starts super charged up by Thor’s hammer and codes day and night. But by my previous experiences and industry interactions I had in the past 1-year, I established that a coding job in a banking firm will fill my pockets but not my inquisitive appetite.
Instead of coding extensively for high paying coding jobs, I decided to opt for Business Analyst roles and focus on Level 2 examination. Managing placements along with FRM gave me a fair idea of what corporate life is going to be in the coming few years. Battling FRM curriculum in the morning, classes in the afternoon, and attending PPTs in the evening, social life, and sleep took a backseat. On the days I bunked college classes to prepare, giving even 12 hours to FRM never seemed enough because ALL IN was the only bet I had. Even the very basic things we do now were difficult at some point. It is natural to get stuck and feel lost during the preparation. DO contact your mentor every now and then because you will need a rope to hold onto as the courses are very tiring due to the level of intricacy you are expected to dive into.
As planned, I did get placed in one of the budding startups- Ola and also cleared Level 2 that too with the top %ile score in Market and Credit Risk, my preferred verticals within Risk. I was unlucky with the big IBs but limited my downside risk of getting placed. The repo and credibility I enjoy make me attempt CFA and CAIA with more enthusiasm. The benefits of these certifications are not materially realized yet (in terms of payslips) but the true benefits of the course apart knowledge gained are professionalism, networking, time management, stress management, over-optimism, and failure have been corrected and improved.
The importance of FRM/CFA is subjective and constrained by financial facilities. Having any certification for your interests is definitely a plus to your existing credibility. Don’t get bogged down by the thought that certifications are end of the day, it’s actually the beginning of the new world you are about to see. Having a mentor at all times is essential to deal with challenges that are relatable. Every advice/experience is best to be taken with a pinch of salt without pre-existing biases.
Financial risk management is a short-hand to the level of the humanitarian crisis the world is facing. If you can survive this you need no motivation only direction and you will get things done. Stay focused, stay determined, and more importantly Stay HIGH!
